ThredUp Grows Buyers to Record 1.82 Million but Cuts Q4 Guidance

ThredUp grew revenue 7% year over year to $88.2 million in Q3, a sharp deceleration from the 34% growth it posted in the same quarter a year ago. The company reported the results on a Wednesday call with analysts.

The platform set records across its marketplace: 1.82 million active buyers, up 16%, plus record orders and items sold, both up 17% year over year. The records did not protect profitability. Net loss widened to $5.5 million from $4.2 million a year earlier, and CEO James Reinhart told analysts the price paid per item fell from $21 in Q2 to $18 in June and has stayed there.

ThredUp responded by cutting guidance. It lowered Q4 revenue expectations to a range of $77 million to $79 million, down from a prior forecast of $85 million to $87 million, and trimmed its full-year outlook to between $337.7 million and $339.7 million.

What does the slowdown change for ThredUp?

Reinhart said near-term demand reflects a heavily competitive environment and that "macro challenges remain for our most price-sensitive budget shoppers." The company is shifting its customer mix in response. Reinhart said ThredUp is "acquiring a more premium customer at higher levels than ever and deprioritizing lower LTV budget customers."

He flagged holiday season risk directly. "Deeper promotions may be required to maintain engagement," he said. He added: "We think retailers are going to be aggressive based on what we saw in October around Q4, they're flushed with tariff refunds." Combined with intense competition, that "sets up for us being concerned about holiday. And ThredUp is not traditionally a strong holiday destination. It's always our weakest quarter of the four."

Peer-to-peer resale rivals compound the pressure. Reinhart called the money those competitors spend on promotions "frankly shocking." He said: "As expected, these dollars have eroded some buyer share, especially among our price-sensitive customers." Sellers, he noted, have shown no impact. "While we take this pressure seriously, we are taking the long-term view. Interest in secondhand is accelerating and other companies are paying for it. By our estimates, more money will be spent in the U.S. this year, encouraging people to buy and sell secondhand than we have spent in our lifetime."

William Blair analysts, led by Dylan Carden, questioned the fundamentals behind the record metrics. "While there seem to be several positives, they cannot detract from the simple fact that revenues are now in decline with uncertain inflection," Carden said in a note. He also credited management for a cautious stance: "We commend management for setting a dour outlook for 2027 on limited expected improvement in the competitive landscape. It is hard to game out when competitive pressures ease, noting that one bad actor, Depop, is owned by eBay, which has deep pockets and is fighting against a well-funded private entity with likely public aspirations."

Can AI agents reset the economics?

ThredUp's competitive answer is agentic commerce. Reinhart said the company is leaning heavily into artificial intelligence agents as shoppers on the platform. "AI agents are first-class shoppers on ThredUp," he said. "Our bet is that agents can sift through millions of one-of-a-kind items far more efficiently than any person, and our managed supply gives them clean, structured data to work with."

The AI push carries costs. In October, at the RetailClub AI Festival conference, Reinhart discussed the expenses of scaling the company's AI use and said: "I was both surprised and didn't care at all."

The Q4 guidance cut signals how much of that AI and premium-mix bet ThredUp must fund while promotions compress its weakest quarter.